Rough Storyline (Summary for M. Paull, Will Not Include) • • • Digital distribution is taking off – Broadband has reached critical mass – Change has historically driven growth in filmed entertainment Opportunity if we capitalize on this / threat if we don’t – Opportunity • Build direct customer relationships (Internet Bypass) • Diversify types of content SPE offers • Expand distribution to new audiences – Threat • Consumption shifts to non-studio content • Revenues shifting to ad-based models • We have almost all transactional / non-advertising revenue base Competitors see the opportunity and are capitalizing on it – Acquiring and partnering across business types (promotional, channels, stores, social networks) – Ad-based models are gaining the most traction If SPE is going to enter we must partner or acquire – Traditionally we have huge gaps in technology – Speed-to-market issues If we’re going to buy, we must buy now – Valuations going through the roof – Attractive players being pulled off the table Grouper is the right company to buy – Leading technology – Leading management team – “Right Scale” – small enough to be affordable, large enough to prove viability 3

SPE Can Best Reach Younger Demographics with Models that Include Two-way Interactivity and Social Networking Percent of Each Age Group Participating in Online Activity Instant Message (18 -28) (29 -40) Read a Blog (41 -50) (51 -59) (60 -69) Source: Pew Internet & American Life Project, December 2005 10

Competitors Have Seen the Potential for Digital Video Distribution and are Introducing Offerings Across Business Models Promotional Channel • Predominantly short video clips that promote the site owner’s content, merchandise, and brand • Includes on-demand videos available in programmed microchannels, on a showby-show basis, or in a traditional channel lineup • May include some advertising, and minimal commerce capabilities, but is promotional in nature • Business model primarily includes advertising, with some upsell to subscription Store • Aggregates video across content providers for purchase • Uses a range of models including sell-thru, rental, and subscription Social Network • Generally consists of short video clips from users of the service • May also provide tools for creating video clips or interacting with video content • Primarily ad-based business models 19

Potential for Advertising Revenue • • • 11 MM streams on ABC could equal $x per year My. Space expected to be generating over $100 MM per year WSJ and other articles re: can barely meet demand for ad-inventory online Quang building 26

Addressable Boxes and 2 -way Infrastructure Could Change the Ad Market Significantly How will the $55 billion in untargeted spend respond to the interactive capabilities being rolled out by cable MSO’s? 31